1. The petitioners are arrayed as accused Nos.1 and 2 in C.C.No.251 of 2007 pending on the file of the Judicial Magistrate No.1, Coimbatore and the respondent herein has filed the above said complaint under Section 27(5) of the Insecticides Rules 1971 seeking prosecution of the petitioners and other accused for the alleged violation of Section 3(K)(i) of the Insecticides Act 1968. As per the complaint, the insecticide Inspector, who has been notified under Section 20 of the Insecticides Act 1968, was directed to draw four number of pesticides' samples from the allocated area namely Tamil Nadu during the remaining period of the financial year (with effect from October, 2004 to March 2005). In exercise of that haver, the said official has drawn sample of pesticide from M/s.N.S.M Fertilisers 6, Panchayat Complex, MTP Main Road, Thudiayalur, Coimbatore.
2. It is further averred that the three identical originally sealed samples were taken from the premises of the pesticide dealer and in the presence of three accused, namely Thiru. M.Palaniswamy and two others and one sample was handed over to the third accused and remaining two samples were taken by complainant/ Inspector of Pecticide for which, necessary acknowledgment has been issued. The samples were subject to chemical analysis and as per the report, the active ingredient content found to be 69% as against 75% and the sample has not been conforming to relevant Indian Standard and hence, according to the complainant, it is mis-branded.
3. A show cause notice dated 07.4.2005 was issued to the dealer M/s.N.S.M.Fertilizers, the Managing Director of Northern Minerals Limited, Gurgaon, Haryana State and the fact of issuance of the said show cause notice was also informed to the Director of Agriculture, Chennai. The manufacturer viz., M/s.Northern Minerals Ltd., had sought for re-analysis of the sample at the Central Insecticides Laboratory (CIL), Faridabad. The dealer viz.,M/s.NSM Fertilizers vide letter dated 19.05.2005 informed that the complaint that they were doing trading business with M/s.Northern Minerals Ltd and they are buying products with well sealed condition and selling the same in original packing and that the quality of the pesticide is responsibility of M/s.Northern Minerals Ltd. The complaint further averred that as per the request made by the manufacturer, it was subjected to chemical analysis at Central Insecticides Laboratory (CIL), Faridabad and as per the analysis report dated 16.9.2005, the active ingredient found to be 69.02% as against 75% which is also not conforming the relevant specification in the active ingredient content and therefore, according to the complainant, the pesticide sample of Mancozeb is misbranded. Therefore, the complainant by filing the said complaint, sought the prosecution of the manufacturer, dealer and the other accused for the commission of offence punishable as per clause 29(a) of the Insecticides Act, 1968.
4. The learned counsel appearing for the petitioners has submitted that there is not even an iota of allegation levelled against the petitioners that they were in-charge or responsible for the conduct of the business of the company and therefore, they cannot be prosecuted.
5. It is further submitted by the learned counsel for the petitioner that the complaint as against these petitioners is also liable to be quashed for want of proper and valid written consent of the State Government or a person authorised in this behalf by the State Government.
6. The learned counsel for the petitioner in order to substantiate his arguments, has placed reliance upon the judgment of Punjab and Haryana High Court reported in 2005(3)RCR(Criminal) 705 (single bench) in L.S.Negi v. State of Punjab. The facts of the said case are that an Insecticide Inspector drew a sample of Pesticide from the shop premises of the dealer M/s.Namdhari on 27.11.1998. The sample was sent to the State Insecticide Testing Laboratory and in the report it has been indicated that the sample does not conform to the Indian Standard specification in respect of its active ingredients contents. Consequently, the complaint was filed under Section 3(k)(i) of the Insecticides Act, 1968 and also under Rule 27(5) of the Insecticides Rules, 1971. Before the Punjab and Haryana High Court, three submissions were made on behalf of the petitioner/accused viz; (i) the company has not been arrayed as party, which is contrary to the settled principles of law pronounced and reiterated in the judgments of Hon'ble the Apex Court so also of this Court; (ii) no where in the complaint it is mentioned that the petitioner was in charge of and responsible to conduct of day to day affairs and business of the company; and (iii) even if the prosecution decided to correct the defect in terms of judgment of Hon'ble the Apex Court reported in AIR 1988 SC 1128(U.P. Pollution Control Board V. Modi Textiles and others), it would not be possible to do so in view of bar created under Section 468 Cr.P.C as the offence is punishable only with a sentence of two years and the limitation prescribed thereunder is three years.
7. The learned Judge of Punjab and Haryana High Court on taking into consideration the facts of the case and the decisions, held that no prosecution can be lodged against any officer of the company without prosecuting the company itself and that in the absence of any specific averment to the effect that the petitioner/accused therein was in charge of and responsible to conduct all the day to day affairs of the company, the complaint and the summoning orders cannot pass the test of judicial scrutiny and for the said reasons, has quashed the complaint.
8. Per contra, Mr. Haja Mohideen Gisthi, learned counsel appearing for the respondent would contend that since the first petitioner happened to be the Managing Director of the manufacturer and the second accused happened to be the Regional Marketing Manager, they are squarely responsible for the commission of the alleged offence and the first petitioner/first accused being the Managing Director of the manufacturer, is responsible for the conduct of its business and day to day affairs. Insofar as the second petitioner is concerned, it is contended by the learned counsel for the respondent that admittedly, he being the Regional Marketing Manager, is responsible for the sale of the product which was found to be mis-branded on chemical analysis and hence, he is also liable to be prosecuted and that the points alleged by the learned counsel for the petitioners can be adjudicated only during the course of the trial.
9. The learned counsel appearing for the respondent in support of the submissions, has placed reliance upon the following decisions:
"(i) JT 2005(8) SC 450 in = 2005(8)SCC 89=2005 SCC (Crl) 1975 in S.M.S Pharmaceuticals Ltd. V. Neeta Bhalla and Anr. (ii) The order dated 28.10.2009 made in Crl.O.P.Nos.28237 0f 2004 etc., batch."
10. The Judgment reported in JT 2005(8) SC 450 pertains to prosecution under Section 138 of the Negotiable Instruments Act wherein the scope of offence committed by the companies came up for consideration. The Hon'ble Supreme Court after taking into consideration the catena of decisions has held that merely being a Director of a company, is not sufficient to make a person liable under Section 141 of the Negotiable Instruments Act and the requirement under Section 141 is that the person sought to be made liable, should be in charge and responsible for the conduct of the business of the company at the relevant time and it is to be averred as a fact as there is no deemed liability of Director in such cases. Insofar as the Managing Director or Joint Manager is concerned, it has been held that they are admittedly in charge of the company and responsible for the company for the conduct of its business by virtue of the office they hold as Managing Director or Joint Manager of the company and these persons are responsible for the conduct of the business.
11. The unreported decision of this Court dated 28.10.2009 made in Crl.O.P.No.28237 of 2004 etc., batch pertains to prosecution with regard to contravention under the Contract Labour (Regulation and Abolition) Act 1970 and the rules framed there under. The single Bench of this Court while disposing of the said writ petition, has taken note of the fact that as per Section 25 of the said Act, a person although is not personally liable for commission of such an offence, would be vicariously liable therefor and such liability can be inferred so far as a company registered or incorporated under the Companies Act, 1956. Before a person can be made vicariously liable, strict compliance with the statutory requirements would be insisted. The learned Judge has also taken into consideration the Judgment reported in JT 2005(8) SC 450 (cited supra) and held that in the absence of necessary averment to show that the first accused was in charge and responsible for the conduct of the business of the second accused company, he cannot be prosecuted and therefore, quashed the proceedings insofar as the second accused company viz., M/s.ETA Constructions (India) Pvt. Ltd., is concerned. The learned Judge found that the second accused being a legal entity incorporated under the companies Act need not be represented by any person and therefore, even assuming that one Mr.Ramesh Kumar is not the Director of the company, it is not going to affect the prosecution as against the second accused and dismissed the quash petition.
12. A reading of Section 33 (1) of Insecticide Act 1968 would disclose that every person, who at the time of commission of offence, was in charge of, or was responsible to the company for the conduct of the business of, the company, as well as the company, shall be deemed to be guilty of offence and was to be liable to be proceeded against and convicted accordingly. A perusal of the complaint would reveal that no averments have been made against the petitioner/second accused as to in what manner he was in charge of or responsible for the conduct of the business or affairs of the company.
13. Insofar as the first accused is concerned, the cause title of the complaint reads as follows:
"Government of India, Rep. By, Dr.Suresh Chandra Bansal, Insecticides Inspector (Deputy Director, Entomology) Directorate of Plant Protection Quarantine and Storage (DPPQS) (Ministry of Agriculture) NH-IV, Faridabad-121001. ... Complainant v. 1. Shri M.K.Dhanuka, Managing Director, Northern Minerals Limited, (Pesticide Division) Dhanuka House, 861-862, Joshi Road, Karol Bagh, New Delhi-11005 (Manufacturer) ... Accused -1
2.Shri R.Shankar, Regional Marketing Manager, Northern Minerals Limited, 4/48, Anna Salai, Swarna Puri, Salem-636004 (Manufacturer) ... Accused-2
3. Shri M.Palaniswamy (Alias)Selvaraj, N.S.M. Fertilizers,
6, Panchayat Complex, M T P Main Road, Thudiyalur P.O, Coimbatore-641034 (Dealer) .. Accused -3"
As per the cause title, the Managing Director viz., Mr.M.K.Dhanuka, Northern Minerals Limited (Pesticide Division), New Delhi-110005 is prosecuted and not manufacturer viz., Northern Minerals Limited. The cause title also does not read as Northern Minerals Limited (Pesticide Division) represented by the Managing Director, M.K.Dhanuka. If the company represented by the Managing Director is prosecuted then the ratio laid down in JT 2005(8) SC 450 in S.M.S Pharmaceuticals Ltd. V. Neeta Bhalla and Anr. and the unreported decision of this Court made in Crl.O.P.Nos.28237 0f 2004 etc., batch dated 28.10.2009 are applicable. But an individual in his capacity as the Managing Director of the manufacturer is being prosecuted as stated above and there is no whisper of any allegation against the petitioners that they are in charge of and responsible for the conduct of the business of affairs of the company and the complaint proceeding on the basis of the chemical analysis reports given by the laboratories. It is pertinent to point out at this juncture, the company is not arrayed as accused but it's Managing Director is prosecuted. In the considered opinion of this Court, the decision rendered by the Punjab & Haryana High Court (cited supra) is squarely applicable to the facts of this Case.
13. In the absence of any specific averments and in the light of the reasons recorded above, this Court is of the considered opinion, that the proceedings in C.C.No.251 of 2007 pending on the file of Judicial Magistrate No.I, Coimbatore insofar as the petitioners/A1 and A2 are concerned are liable to be quashed.
14. In the result, the criminal original petition is allowed and the proceedings in C.C.No.251 of 2007 pending on the file of the Judicial Magistrate No.1, Coimbatore insofar as the petitioners 1 and 2/A1 and A2 are quashed. Consequently, connected miscellaneous petition is closed.